Commentaires matinaux

Market Update

US tsys marginally lower, 10Y 1.734% , above avg volume in TY futures. US equity futures higher (S&P +8), crude close to recent lows (55.40 -0.20) Some curve flattening in tsys attributed to comments from Tsy sec Mnuchin in BBG interview – ‘ultra issuance no longer near-term plan’, also double auction on Monday $81bln in 2 and 5Y notes.  Core EGBs lower, bund curve 1bp steeper – Jan German PMI better than exp (45.2 vs 44.5), Eurozone Composite PMI slightly lower. UK gilts outperforming despite stronger Man PMI. GOCs close to unch, yesterday saw Can/US narrow another 1bp across the curve on top of Tuesday’s 8-10bps narrowing post BOC. Ontario 10Y issue yesterday – $1bln new June 2030s @ 64.5 vs C1.25/30 or 2bps vs Ont29s, opening 64.5/63.5

News headlines

U.S. Futures, Stocks Rise as Virus Fears on Hold: Markets Wrap (Bloomberg) U.S. index futures edged higher while stocks jumped in Europe as investors digested the latest corporate news and economic data, setting aside for now fears over a deadly virus spreading from China. Oil fell for a fourth day.

TSX futures rise as WHO says coronavirus not a global emergency (Reuters) Canada’s main stock index futures rose on Friday after the World Health Organisation stopped short of calling the coronavirus outbreak in China a global emergency.

European stocks climb as economic data fuels growth hopes (Reuters) European shares on Friday were set to post their first daily gain this week on signs of a recovery ahead for growth, with easing worries over the coronavirus outbreak in China also emboldening investors.

Oil Set for Weekly Slump as Asia Virus Adds to Demand Concerns (Bloomberg) Oil headed for a 5% loss this week amid fears that China’s coronavirus will erode fuel demand just as markets struggle with a fragile world economy and adequate supplies.

Bond, equity funds suck-in $25 billion as ‘irrational’ bull phase continues: BofA (Reuters) Global equity and bond funds saw more inflows in the week to Wednesday and the “irrational bullish phase” in markets was likely to continue in the first-quarter if the U.S. Fed continued to pump-in liquidity, BofA said on Friday.

Exclusive: U.S. pushing India to buy $5-6 billion more farm goods to seal trade deal – sources (Reuters) The United States wants India to buy at least another $5-6 billion worth of American farm goods if New Delhi wants to win reinstatement of a key U.S. trade concession and seal a wider pact, four sources familiar with the talks told Reuters.

Bank of England rate cut hangs in balance as Carney bows out (Reuters) The Bank of England is closer to cutting interest rates next week than at any time in the last three years, as governor Mark Carney chairs his last policy meeting and Britain finally leaves the European Union.

U.S. wants trade deal done with UK this year: Mnuchin (Reuters) The United States wants to conclude a trade deal with the United Kingdom this year, U.S. Treasury Secretary Steven Mnuchin said on Friday.

As Lebanese struggle to make ends meet, living costs set to soar higher (Reuters) Lebanese consumers feeling the pinch from rising living costs amid an economic crisis are likely to be squeezed even tighter as more local pounds and less U.S. dollars come into circulation, pushing up inflation.

Market Overview: US 10yr note futures are up 0.036% at 129-27, S&P 500 futures are up 0.23% at 3333.5, Crude oil futures are down -0.27% at $55.44, Gold futures are down -0.48% at $1564, DXY is up 0.21% at 97.897, CAD/USD is up 0.07% at 0.7613.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.513%	2 Year	1.517%
5 Year	1.426%	5 Year	1.547%
10 Year	1.414%	10 Year	1.731%
30 Year	1.551%	30 Year	2.174%

US Economic Data

09:45 AM	Markit US Manufacturing PMI, Jan P  Survey: 52.4  Prior: 52.4
	Markit US Services PMI, Jan P  Survey: 53.0  Prior: 52.8
	Markit US Composite PMI, Jan P  Survey: —  Prior: 52.7

Canadian Economic Data

08:30 AM	Retail Sales MoM, Nov  Survey: 0.60%  Prior: -1.20%
	Retail Sales Ex Auto MoM, Nov  Survey: 0.50%  Prior: -0.50%

Disclosure and Disclaimer

The following sources of information have been, or may have been, used partially or in their entirety to compile the herein provided CTI Capital Securities Inc. (“CTI Capital”) ‘Morning Comments.’ CTI Capital believes these sources to be generally reliable, however, as said sources are varied and from third parties, CTI Capital cannot guarantee the accuracy or completeness of said information: Canadian Press (CP); Bloomberg News (BN); Wall Street Journal (WSJ); Stone & McCarthy Research Associates (SMRA); New York Times (NYT); Financial Times (FT); Market News International (MNI); Globe and Mail; Associated Press (AP); CNW Group (CNW); Reuters; Business News Network (BNN); Market Watch; and others.

Ivan Greenstein, Stephan Buu, Émile Bordeleau

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilieres Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230

Market Update

Tsys higher led by the long end of the curve, 10Y below 1.75% for the first time since Dec 3rd, US equity futures lower (S&P -0.19%).  Core EGBs also higher, no change in monetary policy by ECB as exp, bond buying will continue.  German bunds flatter with 2s30s 1.5bps narrower, 10Y bund -0.28% at two week low.  GOCs higher in line with tsys, Can/US 5-7bps tighter post dovish BOC yesterday, 10Y 1.41% is ~17bps lower on the week, lowest since late Oct. Expect provi supply to pick up again, particularly at these all in yield levels, HQ rumoured.

News headlines

Stocks Slip, Bonds Climb on Virus Fears; Oil Drops: Markets Wrap (Bloomberg) U.S. equity futures fluctuated while European stocks edged lower and Asian shares slumped on Thursday amid lingering concerns that a virus spreading from China to other countries could become a drag on global growth. Treasuries climbed and crude oil fell.

TSX futures edge up as dovish BoC stance offsets lower oil prices (Reuters) Canada’s main stock index futures rose slightly on Thursday, as dovish comments by the Bank of Canada at its policy announcement offset lower oil prices.

Oil Falls to Seven-Week Low as Asia Virus Eclipses Supply Loss (Bloomberg) Oil fell further after hitting a seven-week low on speculation that China’s coronavirus outbreak may dent demand, just as the market already contends with plentiful supplies.

Virus fears sap stocks; ECB gets ready for rethink (Reuters) World shares fell on Thursday, led by the biggest tumble in Chinese stocks in more than eight months, as concern mounted about a new coronavirus outbreak in China.

France, U.S. agree to push global ‘digital tax’ talks forward (Reuters) France and the United States agreed on Thursday how to press ahead with a global rewrite of cross-border tax rules for the digital era, French Finance Minister Bruno Le Maire said.

ECB launches review, keeps policy on hold (Reuters) The European Central Bank left its policy unchanged on Thursday and launched a “strategic review” of its inflation goal and tools.

Bank of England eases liquidity system as Brexit transition deal looms (Reuters) The Bank of England said it will ease its liquidity monitoring system put in place in case Britain left the European Union without a transition deal.

Thai bourse to miss expansion target as economy slows (Reuters) Thailand’s stock market will not reach its goal to expand by nearly 50% from current levels by 2023, its president said on Thursday, as the country’s economic slowdown is hurting share prices.

Thailand plans new tax incentives to boost investment (Reuters) Thailand’s finance ministry will submit to the cabinet on Tuesday a package of tax incentives to encourage investment, a deputy prime minister said on Thursday, as the government looks to revive a flagging economy.

Market Overview: US 10yr note futures are up 0.145% at 129-24, S&P 500 futures are down -0.15% at 3314.75, Crude oil futures are down -1.89% at $55.67, Gold futures are down -0.07% at $1555.6, DXY is up 0.02% at 97.542, CAD/USD is up 0.2% at 0.7598.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.534%	2 Year	1.512%
5 Year	1.439%	5 Year	1.554%
10 Year	1.432%	10 Year	1.741%
30 Year	1.567%	30 Year	2.185%

US Economic Data

08:30 AM	Initial Jobless Claims, Jan 18  Survey: 214k  Prior: 204k
	Continuing Claims, Jan 11  Survey: 1756k  Prior: 1767k
09:45 AM	Bloomberg Economic Expectations, Jan  Survey: —  Prior: 56.5
	Bloomberg Consumer Comfort, Jan 19  Survey: —  Prior: 66.0
10:00 AM	Leading Index, Dec  Survey: -0.20%  Prior: 0.00%
11:00 AM	Kansas City Fed Manf. Activity, Jan  Survey: -6  Prior: -8

Canadian Economic Data

There is no Canadian economic data for today.

Disclosure and Disclaimer

The following sources of information have been, or may have been, used partially or in their entirety to compile the herein provided CTI Capital Securities Inc. (“CTI Capital”) ‘Morning Comments.’ CTI Capital believes these sources to be generally reliable, however, as said sources are varied and from third parties, CTI Capital cannot guarantee the accuracy or completeness of said information: Canadian Press (CP); Bloomberg News (BN); Wall Street Journal (WSJ); Stone & McCarthy Research Associates (SMRA); New York Times (NYT); Financial Times (FT); Market News International (MNI); Globe and Mail; Associated Press (AP); CNW Group (CNW); Reuters; Business News Network (BNN); Market Watch; and others.

Ivan Greenstein, Stephan Buu, Émile Bordeleau

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilieres Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230

Market Update

US tsys trading unch, prices fading since early NA trading on avg volume (TY 350k), 10Y 1.775%, long end outperforming slightly.  US futures higher, S&P +13, Nasdaq +60. Core EGBs mixed – UK gilts under pressure after upbeat factory survey – CBI optimism rose to 6 year high in Jan. GOCs lower ,  0.5-1bp wider vs tsys before Dec CPI & BOC decision. CPI expected to have risen 2.3% from 2.2%, with the common core measure unch at 2.4% –  the avg core measure rose to 2.17% in Nov the highest since 2009.

News headlines

U.S. Futures Gain as China Moves to Contain Virus: Markets Wrap (Bloomberg) U.S. equity-index futures gained on Wednesday as China took steps to contain the spread of a deadly virus that had rattled international markets. Treasuries and the dollar were steady.

CANADA STOCKS-TSX futures tick up ahead of BoC policy meeting, inflation data (Reuters) Futures for Canada’s main stock index edged up on Wednesday, ahead of the central bank’s interest rate decision and inflation data due later in the day.

Stephen Poloz enters home stretch hawkish on rates (BNN) Stephen Poloz is heading into the final few months of his term as Bank of Canada governor showing few signs of giving up his status as one of the industrialized world’s most hawkish central bankers.

Oil Declines on Concerns Asia Virus Could Reduce Demand (Bloomberg) Oil declined on concerns that a coronavirus outbreak in Asia could spread and curtail demand in a market that’s already contending with plentiful supplies.

Trump says will meet with WTO chief, promises ‘dramatic’ steps (Reuters) U.S. President Donald Trump on Wednesday vowed dramatic action with the World Trade Organization, saying the group’s director general would visit Washington as soon as next week, but giving no other details.

Trump says he expects to make trade deal with Europe (Reuters) U.S. President Donald Trump on Wednesday said he expects to be able to make a trade deal with Europe, but that negotiating an agreement is in many ways tougher than the trade pact he brokered with China.

PRECIOUS-Gold steadies on central bank policy expectations (Reuters) Gold was little changed on Wednesday as strong technical support on expected dovish monetary policy from global central banks offset revived appetite for riskier assets and an upbeat dollar.

With record profits on Wall Street, small bonuses will annoy bankers: experts (Reuters) Most Wall Street banks announced their fourth quarter profits beat industry expectations last week. But by the end of this week, bank sources and compensation experts told Reuters, most of their staff will be underwhelmed by their bonuses.

Market Overview: US 10yr note futures are down -0.048% at 129-17, S&P 500 futures are up 0.4% at 3332.75, Crude oil futures are down -0.87% at $57.87, Gold futures are down -0.13% at $1555.9, DXY is up 0.02% at 97.55, CAD/USD is down -0.14% at 0.7662.

Cda Benchmarks	Yield	Tsy Benchmarks	Yield
2 Year	1.623%	2 Year	1.53%
5 Year	1.544%	5 Year	1.578%
10 Year	1.525%	10 Year	1.774%
30 Year	1.634%	30 Year	2.231%

US Economic Data

07:00 AM	MBA Mortgage Applications, Jan 17 Survey: —  Actual: -1.20% Prior: 30.20%
08:30 AM	Chicago Fed Nat Activity Index, Dec  Survey: 0.13  Prior: 0.56
09:00 AM	FHFA House Price Index MoM, Nov  Survey: 0.30%  Prior: 0.20%
10:00 AM	Existing Home Sales, Dec  Survey: 5.43m  Prior: 5.35m
	Existing Home Sales MoM, Dec  Survey: 1.50%  Prior: -1.70%

Canadian Economic Data

08:30 AM	Wholesale Trade Sales MoM, Nov  Survey: -0.40%  Prior: -1.10%
	CPI NSA MoM, Dec  Survey: 0.00%  Prior: -0.10%
	CPI YoY, Dec  Survey: 2.30%  Prior: 2.20%
	Consumer Price Index, Dec  Survey: 136.4  Prior: 136.4
	New Housing Price Index MoM, Dec  Survey: 0.00%  Prior: -0.10%
	New Housing Price Index YoY, Dec  Survey: -0.10%  Prior: 0.00%
10:00 AM	Bank of Canada Rate Decision, Jan 22  Survey: 1.75%  Prior: 1.75%

Disclosure and Disclaimer

The following sources of information have been, or may have been, used partially or in their entirety to compile the herein provided CTI Capital Securities Inc. (“CTI Capital”) ‘Morning Comments.’ CTI Capital believes these sources to be generally reliable, however, as said sources are varied and from third parties, CTI Capital cannot guarantee the accuracy or completeness of said information: Canadian Press (CP); Bloomberg News (BN); Wall Street Journal (WSJ); Stone & McCarthy Research Associates (SMRA); New York Times (NYT); Financial Times (FT); Market News International (MNI); Globe and Mail; Associated Press (AP); CNW Group (CNW); Reuters; Business News Network (BNN); Market Watch; and others.

Ivan Greenstein, Stephan Buu, Émile Bordeleau

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230

Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilieres Inc.

Tel : (514)-861-0240
Fax: (514)-861-3230